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House prices are likely to continue rising for at least another ten years, George Osborne suggested yesterday when he attacked “Nimbys” for slowing down planning reforms – reported on the front page of The Times by Sam Coates, Philip Aldrick and Francis Elliott. The Chancellor told peers that the shortage of housing was an historic problem as he stressed that the coalition was trying to boost supply as well as providing cheaper home loans to struggling families. “I imagine if we were to assemble again in ten years’ time, we would still be talking about the challenge of making sure that our housing supply keeps up with demand,” he told the House of Lords Economics Affairs Committee. Mr Osborne defended the Help to Buy policy in the face of criticism from Liberal Democrats such as Vince Cable, who suggested last week reducing the maximum home purchase of £600,000.

Personal Finance

While The Sun’s leader is dedicated to energy prices, the Daily Mail looks at miss-selling of superfluous insurance against credit card fraud along with a brief history of miss-selling scandals – from pensions mis-selling scandal, endowment mortgages, and Payment Protection Insurance to interest-rate swap loans and packaged bank accounts. Some 7 million customers of banks such as Barclays, Santander and RBS have been conned into paying up to £1.3billion for policies they don’t need – Lloyds is now implicated as well. The Mail says “though the products mis-sold may have varied, one mystery endures. Why, after this long history of deception and grand larceny, has not a single senior banker been hauled before the courts?…. This fraud won’t cease until the guilty are behind bars.”

Property

Prince Charles has waded into the battle for residents of Somerset according to the front page of The Times, The Guardian and the Daily Mail. The Mirror and the Daily Telegraph are unlikely bedfellows but not only do they also put Charles’ criticism of the official response to the crisis on the front page – they also run editorials on it. Although it was not overtly political, the Daily Telegraph compared the Prince’s visit (he was greeted warmly) to that of Owen Paterson, the Environment Secretary, who was met with placards and jeers. The Telegraph says the visit “reminded us in what low regard quangocrats – such as the mysteriously absent Chris Smith, who runs the Environment Agency – are held.” The Mirror’s Leader piece, on the other hand says the Prince of Wales criticising the disastrously slow response… “is a royal seal of disapproval on David Cameron’s Government”.

Recruitment

The Daily Express says “Britain’s overstretched public services are nearing breaking point” blaming immigration. “One in four babies born in this country have a mother who comes from outside the UK, while Afghan and Somali women are having four or more children, more than twice the national average. They will… need medical care before, during and after the birth… and that’s before the needs of schooling and housing even enter the equation…. This simply has got to stop. The Prime Minister has talked grandiosely about bringing net migration figures into the tens of thousands (and even that would be too much in this overcrowded little isle) and yet it has been revealed that net migration from the EU rose to 106,000 in the year ending June 2013, up from 72,000 the previous year. And that was before immigration controls on people arriving from Eastern Europe were lifted in January. Labour’s stance on immigration was one of the wickedest policies it pursued in its 13 years of office, a course of action foisted on the electorate for utterly cynical reasons which has changed the face of this country for ever.” The Express concludes, “Mr Cameron must act to stem further damage. And fast.”

Economics/Business
Businesses have accused Labour of being “anti-business” following their assertion they will reinstate the 50p rate of tax for high earners should they win the next election. The plan to revive the top rate of tax until the defecit has been cleared has been criticised by business leaders as well as former Labour ministers including Lord Myners. The Telegraph Leader accuses Labour of making the pledge for political rather than exonomic reasons stating that throughout most of Labour’s 13 years in office, the top rate of tax was 40p. It only increased to 50p just before the general election for populist reasons rather than economic ones – indeed, the move lost the treasury income. The pledge by Labour has also caused 17 business leaders including Sir Stuart Rose and Karren Brady to write a joint letter to the Telegraph saying the move will discourage investment into Britain, jeopardise the economic recovery and cause the loss of jobs. Telegraph, p.1, 23; FT, p.1

Employment/Recruitment
The economic recovery is widening the gap between London and other UK cities according to the latest Cities Outlook report from think tank Centre for Cities. London accounted for 79% of national jobs growth in the private sector between 2010 and 2012 with 216,700 jobs created over that period – 10 times more than the second fastest growing city, Edinburgh. The latest ONS data shows that London accounted for 22% of overall employment growth over the period, growing twice as fast as the national average. In contrast, towns such as Bradford, Blackpool and Glasgow have had job losses in both private and public sectors. FT, p,4

Property
David Cameron will today announce a drive to build thousands more homes by slashing building regulations. More than 100 rules applied to new homes will be cut to fewer than 10. The move will save developers £60m a year, equivalent to £500 for every new property built. Rules setting out minimum window sizes, the dimensions of rooms, the strength of front doors, and arrangements for lavatories, lighting, telephone lines and disabled access will be culled. It is hoped the move will result in far more homes being constructed. Telegraph, p.2

Personal Finance
Workers could increase their pension by a third in exchange for fewer guarantees about retirement income under a far-reaching pre-election shake-up of the industry. The Government will try to transform the pensions market by backing controversial occupational schemes commonly used in the Netherlands but previously rejected in Britain over fears the dangers were too great. Amid growing concern about falling pension incomes, ministers believe they can build enough safeguards into the proposed schemes to make them acceptable. Studies suugest the collective pensions could deliver returns of about 30% more than the occupational scheme currently used by most British employers. Times, p.1,2

Economics
The IMF will today upgrade its growth forecasts for the UK by more than any other nation, cementing Britain’s position as one of the fastest growing major economies. The IMF is expected to revise its UK growth forecast for 2014 to 2.4% from the 1.9% it predicted in October. The IMF’s stance contrasts with its view a year ago, when Oliver Blanchard, its chief economist, said George Osborne was “playing with fire” with his austerity drive. Telegraph p.1,B1; Daily mail, p.2

Personal Finance
Paying into a pension pot should be made compulsory in the same way as paying taxes according to think tank Policy Exchange who have called on the Government to create a “Help to Save” scheme. Amid concerns that people are not saving enough for retirement the scheme would make it obligatory for people to build a pension pot by removing the opt-out in the existing auto-enrolment scheme. Research from PE found that someone earning £27,000 will need to save six and a half times more than they currently do to generate the recommended retirement income of £16,200. The average pension pot is estimated to be £36,000, which on current annuity rates would generate a retirement income of £1,340. Telegraph, p.6

Employment
Nigel Farage, leader of UKIP, has asserted that mothers working in the City are worth less to their employers than their male counterparts. Farage said yesterday that women should sacrifice having a family if they want to get on in the City, arguing that taking extended breaks for child rearing damaged client relationships. FT, p.2; Daily Mail, p.12; Daily Mirror, p.6

Property
Zoopla has ended its sponsorship of West Bromich Albion following the furore surrounding the “Quennelle” gesture made by Nicolas Anelka in a match against West Ham over Christmas. Zoopla have sponsored West Brom since the beginning of the 2012 season. Daily Mail, p.79,80; Daily Express, p.72, 68; Sun, p.27: Daily Mirror, p.61,64

There’s a neat summary of house price forecasts for 2014 from Hilary Osborne in The Guardian. The bulls: Rightmove and RICS (8 per cent). The bears: “the normally downbeat” Capital Economics (5 per cent). the consensus appears to be about 6.75 per cent. There’s also, an analysis of the accuracy of predictions for 2013. The booby prizes went to Knight Frank (who forecast a fall of 2 per cent and reported an increase of 7 per cent) and arch pessimists Capital Economics, who forecast Nationwide’s index would fall 5 per cent – the Nationwide HPI rose 6.5 per cent over the year. Closest call was RICS who forecast a rise of 2 per cent then reported a rise of 5 per cent.

A Capital Economics forecaster

Personal Finance

In an editorial piece in the Daily Express (beneath an expression of gratitude to our troops and above a rather toadying message to the Queen – “here’s to the next royal baby, Ma’am!) the paper highlights the importance of pensions (sparked by a report on a potential pensions disaster for the next generation). The Express says, “If half the population aren’t paying enough towards their pensions or are leaving it too late to join then there is a time bomb ticking that will cause immense hardship and worry. If youngsters won’t listen to the Government or experts then it is the duty of parents and grandparents to put them wise to one of the best investments anyone can make”

Property

Leader pieces in the Daily Mirror and the Daily Telegraph focus on flooding. In “Joy’s at a premium” the Daily Mirror argues that insurance companies should play fair and pay up promptly. “Instead of quibbling they should help put the lives of those affected back together rather than hindering them. Firms who happily pocket the monthly premiums have a moral duty to write a big cheque when a legitimate claim is made by a policy holder”. The Daily Telegraph, on the other hand, says should consider if we are doing all we can to ward against flooding. Earlier this year, the Coalition announced that it would spend more on flood defences, after cutting back when it came to power. But MPs warned this would still not keep pace with increasing risks: “a renewed focus on this issue will prevent the wreaking of similar devastation on more homes, and more lives, in the years to come.”

Recruitment and Employment

The BBCs reports a survey by the recruitment organisation, Randstad, which shows that while the recession has led to a drop in the number of people commuting as people lost their jobs – there has been an increase in people travelling more three hours a day. The poll, which looked at the commuting patterns of 2,000 workers between 2008 and 2013, found that almost one in 10 respondents were now travelling for that period a day – compared with one in 20 previously.

Economics
The Financial Times and The Guardian lead with the news that Mark Carney has signalled that the UK economy is ready to start moving away from loose monetary policy as he announced the withdrawal of Funding for Lending for mortgage lending. After endless questions about what the Bank of England will do to counter a housing bubble the answer finally came yesterday. As well as ending the incentives for cheap liquidity for banks to lend to households, the BofE is also ending a waiver on bank capital requirements for house-hold lending. Mr Carney said the steps put in place would reduce the need for “larger interventions” in the future. The MPC also warned it would require banks to test mortgage borrowers’ ability to withstand larger interest rate rises than they currently do. LEX argues that action was inevitable suggesting that “a Martian landing from outer space and looking for somewhere to live in the UK would immediately realise that government incentives are pumping up Britain’s housing sector and house prices”. Housebuilder’s shares slipped 3-6% on the news. FT, p.1,3,LEX; Guardian, p.1,2

Property
When it comes to buying homes, house hunters trust their nose more than their eyes. A survey from interior designers A Passion for Homes has shown that nasty smells come top of the list of house-buying turn-offs, ahead of damp patches, cracked walls and bad décor. The problem is not just the usual suspects of wet dogs, kitty litter and cigarette smoke. Buyers claim 10% of whiffs come from the people selling the property. Telegraph, p.19

Personal Finance
Co-op is suffering a customer exodus after the scandals over its chairman and revelations about its finances. In a surprise statement yesterday the bank admitted there had been increasing numbers of customers ditching current accounts. Experts pointed out it must have been a significant number of customers to warrant the stock market announcement. Daily Express, p.20

Employment
The main employment news focusses on the announcement of new family-friendly laws that will allow fathers to share up to 50 weeks of parental leave with their partners. New parents will also be able to divide their time off into as many extended breaks as they want as long as their employers agree. The reforms will extend parents’ right to request flexible working to all employees, in an attempt to reflect the growing role of grandparents and other carers in looking after children. Times, p.1,2 ; Telegraph, p.1.2

EconomicsThe front page of the Daily Mail says Britain’s two state-backed banks have been accused of running thousands of small firms by using “disgraceful” business practices. RBS and Lloyds “harmed their customers through their decisions and caused their financial downfall” according to a bombshell report released today by Laurence Tomlinson. The report claims RBS acted like a “hit squad” by deliberately causing healthy businesses to go bust for its own gain.

Personal FinanceImmigrants and the seriously ill are in line for “a fresh Tory welfare raid” according to Tom McTague, in the Daily Mirror. More than 500,000 sufferers of long-term conditions such as cancer face losing benefits currently paid to them as they train for a return to work.

PropertyIn the Daily Express, Sarah O’Grady reports that house prices jumped by £7430 last month – and are up £1,300 a week according to estate agency Sequence. Richard Sexton, director of e.surv chartered surveyors said, “Help to Buy has opened a flood of new buyers, causing prices to surge upwards.” The second phase of the Government’s Help to Buy scheme was launched in October and offers lenders a taxpayer-backed guarantee on 95 per cent mortgages on homes costing up to £600,000. In the first month, 2,000 sales were arranged.

Employment & RecruitmentThe FT’s editorial looks at university degrees pointing out that, since the 1963 Robbins report, widening access to university has been a central aim of UK education policy. Roughly half of young people now study for a degree, against 4 per cent when the report was written.

But the FT’s stance is that rising participation is welcome only if the benefits justify the cost: “young people’s horizons will not be widened by pushing university for its own sake.”

The National Institute of Economic and Social Research (Niesr) puts growth at 1.4% next year largely based on the view that house prices would increase by more than 5 per cent. The think tank also expected unemployment to fall gradually to 7.4% by the middle of next year. FT, Mail, Independent.

Personal Finance

50 Co-op branches face the axe but CEO says the bank would retain its ethical values which are to be written into its constitution for the first time and cannot be changed while the co-op remains a major shareholder. Everywhere.

Energy firms will be told today to return millions of pounds to customers who have overpaid bills because they use direct debit after it emerged they were stock-piling an estimated £2billion this way. Daily Mail.

A fifth of shopping takes place online say British Retail Consortium accounting for 24.1% of clothing sales and 3.7 % of health and beauty sales, 30% of all footwear. Telegraph and Mail.

Property

Rapid boost for UK builders as sector heat up as UK construction firms continue their upward climb during October posting the strongest one-month improvement to activity since before the financial crisis. However, RICS says that despite the fact that building activity is still down on its pre-crash levels, companies are reporting shortages in both skilled labour and materials. CityAM, Telegraph and Times.

Recruitment

Employers hire foreign workers because they are better qualified and work harder says Niesr. They interviewed executives who said that British workers need to up their game because they faced growing opposition from aboard, Daily Telegraph; CityAM

Women returning to work are crucial to recovery says culture secretary Maria Miller insisting that women are not an optional part of the labour force. A survey of 2000 women by law firm Slater & Gordon last year found that one in four mothers feel they have been discriminated at work while pregnant or after returning to their job. Daily Mail.